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Are High Taxes Restricting Indiana’s Growth?


  • Tatom, John


The “Hoosier Comeback” program, sponsored by the Indiana Economic Development Corporation, is part of a strategy to boost economic growth, in this case through increasing the quantity and quality of available human resources by providing subsidies to encourage the return of former residents. Whether emigration rates could be boosted more by cuts in income tax rates or by cuts in the corporate, sales or property taxes is an open issue, but the taxes that have risen most in recent years have been sales and property taxes. The Tax Foundation’s State Business Climate Index suggests that more bang would come from cutting the individual income tax. Economic theory would also suggest that cutting taxes on corporate capital income, or property (structures) would have the largest efficiency gains because the underlying resources are the most mobile.

Suggested Citation

  • Tatom, John, 2006. "Are High Taxes Restricting Indiana’s Growth?," MPRA Paper 17825, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:17825

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    References listed on IDEAS

    1. Dennis Epple & Thomas Romer & Holger Sieg, 2001. "Interjurisdictional Sorting and Majority Rule: An Empirical Analysis," Econometrica, Econometric Society, vol. 69(6), pages 1437-1465, November.
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    More about this item


    tax rates and migration; tax policy and growth;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth


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